By William Schomberg and David Milliken
LONDON -Britain’s government will extend until March 2022 a ban on evictions of businesses that stopped paying rent due to the coronavirus crisis, a junior finance minister said.
The extension to the moratorium – which had been due to expire at the end of this month – was welcomed by a trade body representing retailers, but landlords said allowing rent arrears to build up for a further nine months was wrong.
In April last year the government blocked legal attempts to evict shops, restaurants and other businesses that had stopped paying rent, as part of emergency measures to soften the economic impact of the pandemic.
The measures had been due to expire on June 30 but calls for an extension grew after Prime Minister Boris Johnson said on Monday that a lifting of most remaining social-distancing rules in England would be delayed by a month until July 19.
“Existing measures will remain in place, including extending the current moratorium to protect commercial tenants from eviction to March 25, 2022,” Steve Barclay, chief secretary to the Treasury, told parliament on Wednesday.
Under current COVID rules, many businesses can only serve customers at reduced capacity, which restaurants in particular say makes them unprofitable.
Businesses were also concerned that landlords would immediately demand repayment of rent that went unpaid while they were shut during the pandemic.
“Retailers need time to trade their way out of debt; this announcement does exactly that,” the British Retail Consortium’s chief executive Helen Dickinson said.
Barclay told parliament on Wednesday that the government planned to introduce legislation to support the “orderly resolution” of debts resulting from COVID-19 business closures via binding arbitration if other negotiations fail.
The extension of the moratorium would cover the period until that new legislation was effective, he said.
But a law firm representing landlords called the delay “extremely disappointing”.
“Nothing is done here to address or recognise the financial pressure landlords are facing, or that there are tenants out there who can pay but have been taking advantage of the government’s measures,” said Danielle Drummond-Bassington, a real estate disputes partner at law firm CMS.